Róisín Shortall (Dublin North West, Labour)
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Question 98: To ask the Minister for Finance if the income tax levy will be charged against the income of a person with a State pension and an occupational pension when the medical expenses of that person exceed their total income, for instance in the case of a person in a private nursing home; and if he will make a statement on the matter. [40489/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The position is that the income levy will be applied to gross income except social welfare payments and contributory and non-contributory State pensions. It is also intended to provide a threshold which will exempt those on low incomes. It is not intended to provide for the application of any tax reliefs or credits against the liability which an individual may have in respect of the income levy. Full details regarding provisions, in relation to the collection, recovery, inspection of records, and other provisions required in relation to the income levy will be set out in the Finance Bill.

As announced in the Budget, health expenses relief will continue to be available at the marginal tax rate for nursing home expenses throughout 2009. In addition, I would draw the Deputy's attention to the new Nursing Homes Support Scheme Bill 2008 which was published by the Minister for Health and Children in October. The Bill covers both public and private nursing homes and it will, for the first time, make the arrangements for financial support for people who need long term care comprehensive, clear and coherent.

Leo Varadkar (Dublin West, Fine Gael)
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Question 99: To ask the Minister for Finance the extent to which businesses can recover VAT incurred in other EU states on-line; and if he will make a statement on the matter. [40492/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am informed by the Revenue Commissioners that the Eighth EU VAT Directive provides that businesses established in one Member State may claim a refund of VAT incurred in another Member State in certain circumstances. In accordance with that Directive, Irish businesses claiming refunds are required to forward the application and original supporting documentation direct to the other Member State. Some Member States then make the repayment by cheque and others repay via electronic funds transfer.

The Deputy may wish to be aware that a new EU Directive will come into effect on 1 January 2010, the main purpose of which is to modernise and automate the procedures for processing repayment claims under the Eighth EU VAT Directive. The new Directive provides that all claims by businesses registered in Ireland will be sent via electronic means to the Revenue Commissioners who will then forward them to the relevant Member State where the VAT was incurred. That State will then make the repayment direct to the Irish business. While the Directive is not specific as to how claims will be paid, it is expected that most States will pay via electronic funds transfer. Arrangements for implementing the new Directive in Ireland are progressing.

Leo Varadkar (Dublin West, Fine Gael)
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Question 100: To ask the Minister for Finance the extent to which VAT returns can be filled in on-line; the potential savings for business; and if he will make a statement on the matter. [40493/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am advised by the Revenue Commissioners that the Revenue On-Line Service (ROS) allows filing of the normal regular VAT returns (VAT3 Returns) and the annual VAT return on trading details. It also provides for the payment and repayment of VAT liabilities. The payments and returns are due to be filed either bi-monthly, at four-monthly intervals or annually depending on the size of the business.

The volume of VAT returns submitted via ROS increased by 30% from over 350,000 in 2006 to nearly 460,000 in 2007. In 2007, over one-third of VAT 3 returns were filed on ROS.

There are significant cost savings and efficiency gains for businesses that use ROS because ROS is quick and easy to use and it facilitates cash flow management. The forms are simple. Once a form is validated and transmitted to ROS, an instant acknowledgement is sent to the taxpayer's ROS inbox.

ROS returns are processed automatically and the taxpayer's Revenue record is updated within days of filing. The faster processing of returns leads to speedier repayments (if due). Within Revenue, the customer service standards for processing ROS returns provide for quicker processing. In addition, there is a special ROS helpdesk (and 1890 lo-call number) to provide assistance to anyone who has difficulties with the service.

A further advantage for ROS users is that the ROS customer information service gives a business or its tax agent access to its Revenue Account. This means that a business can see a full record of VAT transactions — filing, payment or repayment — since it first used ROS. This facility makes it easier to keep track of VAT transactions.